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Marketing Theory and Practice

PEST Analysis Coca Cola


Prepared By
Awais Ali Arshad

MBT-FA11-157

Prepared By
Feburary 25th 2013
Submitted to
Bilal Javed
Contact Me
0343-4347631

PEST analysis
INTRODUCTION:PEST analysis is concerned with the environmental influences on a business.
The PEST stands for the Political, Economic, Social and Technological issues that could affect
the strategic development of a business.
Identifying PEST influences is a useful way of summarizing the external environment in which a
business works.

Definitions and importance in different perspectives


The constituents of PEST can be considered as macro-environmental factors and its usefulness
lies in the assumption that the success of a particular organisation or management solution
cannot be understood without having the information relevant to the specific business
environment (Buchanan and Gibb, 1998).
Business environment could be defined as all relevant physical and social factors outside an
organization that are considered into decision-making process (Duncan, 1972).
According to Ward and Rivani (2005) PEST analysis assumes that specific external and indirect
circumstances that characterize the business environment are able to influence organizational
capacity to produce value. Hence, PEST analysis provides a satellite view to assess the
external environment (Ward and Rivani, 2005).

PEST analysis Use


PEST has been conventionally used in two different ways: first, to analyze the position of a
particular organization (e.g. Vrontis and Vignali, 2001) or industry sector (e.g. McManus et al.,
2007: 19-36) within a particular business environment; second, to analyze the viability of general
management solutions in a business environment (e.g. ESCWA, 2005).
Coca cola

Our Vision
To become a market leader in ready to drink segment while adding best-in-class value to all
stakeholders.

Our Mission
Coca-Cola Pakistan exists to refresh the consumers, inspire moments of optimism through our brands and
actions as well as benefit all stakeholders, which we will do with highest social responsibility and with
uncompromising commitment towards quality of our products and integrity in our operations

Our Values
Our Core Values underlie everything we do. We live by them for two reasons; they are good and right in
themselves, worthy of adherence even at the risk of loss of profit-making opportunities, and they
epitomize our Companys integrity, which we believe will produce value for our stakeholders over the long
term.

Accountability We act with high sense of responsibility and hold ourselves acountable.

Passion We put our hearts and mind into what we do.

Integrity We are open, honest, ethical and we trust and respect each other

Teamwork We collaborate for our collective success

POLITICAL FACTORS
POLITICAL
FACTORS,
ARE
HOW
AND
TO
WHAT
DEGREE
A GOVERNMENTINTERFERENCE IN HIS ECONOMY. SPECIFICALLY, POLITICAL
FACTORS INCLUDE AREAS SUCH AS

TAX POLICY
Pakistan
Income Tax Rate
Pakistan
Corporate

20%

Tax

Rate

Pakistan
Sales Tax / VAT Rate

35%

16%

Coca cola hired local resident tax manager to cope up with Pakistani taxation policy.

BASIT AHMAD Tax Manager at Coca-Cola Pakistan & Afghanistan Region Office. Coca cola
increased its prices accordingly to shift burden of taxes.

LABOR LAW

An essential ingredient in every one of our products is our profound


commitment to human rights and workplace rights. Respecting human rights
and protecting workplace rights is fundamental to our culture and imperative
for a sustainable business. In our Company and across our system, we are
working to make sure all people are treated with dignity and respect. .We
also Implement the United Nations Guiding Principles on Business and
Human Rights while following Pakistani rules which are
Factories Act 1934
Punjab Factories Rules 1978
Industrial and Commercial Employment Ordinance 1968
Provincial Employees Social Security Ordinance 1965
Employees Old Age benefits Act 1976
Payment of wages Act 1936
Minimum Wages Ordinance 1961
WP Minimum wages for unskilled worker Ordinance 1969
Worker Children Education Ordinance 1972
Worker Welfare Fund Ordinance 1971 (Benefits Under Law)

Workman Compensation Act 1923


Employment of Children Act 1991
Company Profit (Worker Participation Act 1968)
Industrial Relation Act 2010
West Pakistan Maternity Benefit Ordinance 1958
Bonded labor System (Abolition) Act 1991

An essential ingredient in every one of our products is our profound commitment to human
rights and workplace rights. Respecting human rights and protecting workplace rights is
fundamental to our culture and imperative for a sustainable business. In our Company and across
our system, we are working to make sure all people are treated with dignity and respect.

But on the other side


Coca-Cola:
foul
play
in
Multan
by
world
Greets new union with death threats, abduction, extortion and dismissals

TRADE RESTRICTIONS
THERE ARE NO TRADE RESTRICTIONS IN PAKISTAN

TARIFFS

cup

sponsor

1. Here are customs tariffs on import of Waters, including mineral waters and aerated
waters, containing added sugar or other sweetening matter or flavoured, and other
non-alcoholic
beverages,
not
including
fruit
or
vegetable
juices,
Customs
Sales
Add
Income

duty
Tax
Sales

=
=
Tax

Tax

=
=

35%
16%
3%
5%

In some sort of beverages & drinks you also need to pay


Federal Excise duty = 12% (If retail price is mentioned on Goods)
Or
Federal Excise duty = 40% (If retail price is not mentioned on Goods)

POLITICAL STABILITY
For the first time in history of Pakistan PPP have completed its tenure but now in Baluchistan,
queta , Peshawer and leari are those areas where government is unstable and elections are
expected to be held in Pakistan.
Now there is care take Government in Pakistan. Pakistan inching toward political uncertainty

ECONOMIC FACTORS
Here the coca cola analyze the economy of Pakistan and know how the
economic factors are influence on company the factors may be include of
Economic growth,
The Gross Domestic Product (GDP) in Pakistan expanded 3.67 percent in the fiscal year 2011-12
from the previous year. GDP Growth Rate in Pakistan is reported by the Pakistan Bureau of
Statistics. Historically, from 1952 until 2012, Pakistan GDP Growth Rate averaged 5.0 Percent
reaching an all time high of 10.2 Percent in the fiscal year of 1953-54 and a record low of -1.8
Percent in the fiscal year of 1951-52. Pakistan is one of the poorest and least developed countries
in Asia. Pakistan has a growing semi-industrialized economy that relies on manufacturing,
agriculture and remittances. Although since 2005 the GDP has been growing an average 5
percent a year, it is not enough to keep up with fast population growth. To make things even
worst, political instability, widespread corruption and lack of law enforcement hamper private
investment and foreign aid.
PAKISTAN INTEREST RATE
The benchmark interest rate in Pakistan was last recorded at 9.50 percent. Interest Rate in
Pakistan is reported by the State Bank of Pakistan. Historically, from 1992 until 2013, Pakistan
Interest Rate averaged 12.75 Percent reaching an all time high of 20 Percent in October of 1996

and a record low of 7.50 Percent in November of 2002. In Pakistan, interest rates decisions are
taken by the State Bank of Pakistan. The official interest rate is the discount rate. This page
includes a chart with historical data for Pakistan Interest Rate .this thing affected
Exchange rates
1 US Dollar equals 98.20 Pakistani Rupee

Pakistan Inflation Rate


The inflation rate in Pakistan was recorded at 8.10 percent in January of
2013. Inflation Rate in Pakistan is reported by the Pakistan Bureau of
Statistics. Historically, from 1957 until 2013, Pakistan Inflation Rate averaged
8.04 Percent reaching an all time high of 37.81 Percent in December of 1973
and a record low of -10.32 Percent in February of 1959. In Pakistan, most
important categories in the consumer price index are food and non-alcoholic
beverages (35 percent of total weight); housing, water, electricity, gas and
fuels (29 percent); clothing and footwear (8 percent) and transport (7
percent). The index also includes furnishings and household equipment (4
percent), education (4 percent), communication (3 percent) and health (2
percent). The remaining 8 percent is composed by: recreation and culture,
restaurants and hotels, alcoholic beverages and tobacco and other goods
and services. This page includes a chart with historical data for Pakistan
Inflation Rate.

Pricing strategy
Pakistan inflation rate is affecting the consumer purchasing power of
consumers.
This pricing strategy makes consumers perceive the products to be affordable. They have had the
privilege of a worthy competitor constantly driving them to be smarter, faster, and better. Coca
Cola planned to use the lower price point to penetrate new cities that were especially price
sensitive. The carbonated soft drink market in Pakistan is nearly 57% of the total beverage
market there.

Position support Pricing


Coca Cola has been doing continuous focus on its price related positioned. With the help of
experience of over the years coca cola has finally emerged with the best marketing strategy of its
time and successfully maintained its position as an affordable enjoyment .

Consumer protection

Consumer Rights Commission of Pakistan (CRCP) is a rights-based civil initiative registered


under the Trust Act, 1882. Established in 1998, CRCP is an independent, non-profit, and nongovernmental organization. It largely works through local fund-raising and engaging volunteers.
It is not supported by any industry or commercial sector. It is the first national consumer
organization in the country, which approaches the issue of consumer protection in comprehensive
and holistic terms. Its vision and strategies have significant cross linkages with both market
practices and issues of governance
Coca cola is following and meeting all international and Pakistani consumer rights.

SOCIOCULTURAL FACTORS.
IN THE SOCIOCULTURAL FACTORS THE COCA COLA COMPANY WILL ANALYZE
THE SOCIAL FACTORS INCLUDE THE
HEALTH CONSCIOUSNESS
RESULTS
A total of 393 patients were surveyed. The majority were young married men, in either private or
government service (Table-I). Respondents preference for consumption or otherwise, of fats and
oils, sweets, spicy foods, salt, fruits and vegetables, tea, coffee, cola drinks and alcohol are listed
(Table-2).
Table-1: Demographic Profile of the Study Population (n=393)
PARAMETER

NUMBER (%)

SEX:
Males

254 (65)

Females

139 (35)

Mean Age in Years SD

32.912.13

Marital Status:
Single

144 (37)

Married

245 (62)

Others
(Divorced/widowed)

4 (1.0)

Educational Status:
Illiterate

13 (3.0)

Primary

18 (5.0)

Secondary

38 (10)

Matriculation

65 (16)

Intermediate

102 (26)

Graduate

117 (30)

Post-graduate

35 (9.0)

Diploma

5 (01)

Occupational status:
Private service

124 (32)

Government service

25 (6.0)

Self employed

36 (9.0)

Unemployed

12 (3.0)

Student

76 (19)

Laborer

35 (9)

Othersincluding
housewives

85 (22)

Table-2: Respondents attitude towards consumption of food and drink items (n=393)
Prefer to consume

Avoid consumption

Do
prefer/avoid

Number

Number

Numbe
r

Fats & Oils

103

26

63

16

227

58

Sweets

84

22

72

18

237

60

Spicy food

86

22

56

14

251

64

Salt

110

28

27

256

65

239

61

16

138

35

319

81

70

18

Food/Drink Item

Fruits
vegetables
Tea

&

not

Coffee

117

30

271

69

Cola drinks

253

64

134

34

Alcohol

13

371

94

Respondents practices with regard to hand washing, brushing of teeth, preventive


dental check-up, duration of sleep, water consumption and eating of fish are listed (Table3) Respondents status with regard to chewing of tobacco and betel nuts is listed (Table-4).
DISCUSSION
The demographic profile of the study population shows, that the majority of the
respondents were well educated and better placed socio-economically, then the rest of the
population in general. This is a limitation in the study since the more affluent and better
educated people use the facility.
Table-3: Respondents status of healthy practices (n=393 )

Table4: Respondents status of chewing tobacco and betel nuts (n=393)


Status of Tobacco/betel nut
chewing

Number

69

17

324

83

Yes

79

20

No

314

80

Total

393

100

Tobacco
Yes

chewing

No
Betel nut chewing

Waris Qidwai, Danish Saleheen, Sadia Saleem, Marie Andrades, Syed Iqbal Azam
Community Health Sciences, Family Medicine Division, The Aga Khan University, Karachi, Pakistan

POPULATION GROWTH RATE,


Population growth rate: 1.551% (2012 est.)
Definition: The average annual percent change in the population, resulting from a surplus (or
deficit) of births over deaths and the balance of migrants entering and leaving a country. The rate
may be positive or negative. The growth rate is a factor in determining how great a burden would
be imposed on a country by the changing needs of its people for infrastructure (e.g., schools,
hospitals, housing, roads), resources (e.g., food, water, electricity), and jobs. Rapid population
growth can be seen as threatening by neighboring countries.
Source: CIA World Factbook - Unless otherwise noted, information in this page is accurate as of
July 26, 2012
Population
190,291,129 (July 2011 est.)

Age structure
0-14
years:
35.4%
(male
34,093,853/female
15-64
years:
60.4%
(male
58,401,016/female
65 years and over: 4.2% (male 3,739,647/female 4,157,870) (2011 est.)

32,278,462)
54,671,873)

Median age
total:
male:
female: 21.6 years (2011 est.)

21.6
21.5

years
years

Population growth rate


1.551% (2011 est.)
Birth rate
24.3 births/1,000 population (2011 est.)
Death rate
6.8 deaths/1,000 population (July 2011 est.)
Net migration rate
-2 migrant(s)/1,000 population (2011 est.)
Urbanization
urban
population:
36%
of
total
population
rate of urbanization: 3.1% annual rate of change (2010-15 est.)

(2010)

Major cities - population


Karachi 13.125 million; Lahore 7.132 million; Faisalabad 2.849 million; Rawalpindi 2.026
million; ISLAMABAD (capital) 832,000 (2009)
Sex ratio
at
under
15-64

birth:
15
years:

1.05
years:

1.06
1.07

male(s)/female
male(s)/female
male(s)/female

65
years
and
over:
total population: 1.06 male(s)/female (2011 est.)

0.89

male(s)/female

Infant mortality rate


total:
61.27
deaths/1,000
male:
64.51
deaths/1,000
female: 57.88 deaths/1,000 live births (2011 est.)

live
live

births
births

Life expectancy at birth


total
population:
male:
64.52
female: 68.28 years (2011 est.)

CAREER ATTITUDES

66.35

years
years

New expected investment of Coca Cola pakistan


It was an announcement made so quietly that it did not even make the headlines: having
already invested $172 million in Pakistan this past year, The Coca Cola Company one of
the worlds largest beverage companies is planning on investing another $248 million in
the country over the next two years.
It may have something to do with the fact that Pakistanis are estimated to have spent
approximately Rs110 billion ($1.3 billion) on carbonated beverages in 2011, according to an
analysis by The Express Tribune based on figures compiled from industry sources. Coca Cola
currently enjoys a 30% market share, second only to arch-rival PepsiCo.
We see great potential in Pakistans future, which is why the company is investing significantly
in upgrading infrastructure and adding value to allied industries, said Rizwan Khan, general
manager for The Coca Cola Company in Pakistan and Afghanistan.

The money will be spent on two new bottling plants, one each in Karachi and Multan, as well as
investing in more coolers, which will be distributed amongst retailers to help with the companys
retail sales efforts. Company officials were quick to point out that the investment is not simply
the recycling of profits and cash flows from existing operations in Pakistan, but green-field
foreign direct investment that will flow into the country over the next two years.
The expansion plans come as rising demand makes it difficult for Coca Cola to keep pace with
its existing production capacity in Karachi and Punjab. The new plants will follow the
establishment of a Coca Cola facility, already completed in 2011, which manufactures Coke
cans. Previously, Coca Cola used to import cans from its factories in other countries.

Coca Cola
Consumers become more health conscious then company lunch new product to
address consumer needs, such as diet coke and coca cola zero.

Workplace Diversity
Diversity is at the heart of our business. We strive to create a work environment that provides all
our associates equal access to information, development and opportunity. By building an
inclusive workplace environment, we seek to leverage our global team of associates, which is
rich in diverse people, talent and ideas. We see diversity as more than just policies and practices.
It is an integral part of who we are as a company, how we operate and how we see our future.

Social responsibility in coca coal


Fahad Qadir, Director Public Affairs, Communications for Pakistan, Afghanistan Region
Coca-Cola
Muhammad
Daily

Yasir
Times

Business

is
Reporter

Fahad
Qadir
has
been
with
Coca-Cola for nearly five years. He leads the ongoing stakeholder engagement with the
government, media, non-governmental organisations (NGOs) and others. He also manages the
corporate and brand personal relation (PR) strategy and Coca-Cola's corporate social
responsibility
(CSR)
programme.
As a result of his advocacy for socio-economic development of local communities in Pakistan,
Coca-Cola has initiated various projects to support environment conservation, education and
rehabilitation
of
physically
challenged.
Qadir is leading key PR projects for Coca-Cola's Eurasia and Africa Group, comprising 92
countries. He is a member of International Government Relations Network of the company and
leads
Partners
for
a
New
Beginning
(PNB)
projects
in
Pakistan.
Prior to Coca-Cola, Qadir worked for Lahore University of Management Sciences and Din
Media
Group.

In honorary capacity, he advises NGOs like Lahore Businessmen Association of Rehabilitation


of Disabled and CARE. He was also a key member of American Business Forum's founding
committee.

Technological:

Government spending on research

Pakistan
spending
less
than
two
percent
of
budget
on
research
KARACHI (May 24 2007): Pakistan is among 162 countries in the world for contributing less than two
percent of the budget on research, which is the major reason for deterioration in economics and technology.

Research and development expenditure (% of GDP) in Pakistan


The Research and development expenditure (% of GDP) in Pakistan was 0.46
in 2009, according to a World Bank report, published in 2010. Expenditures
for research and development are current and capital expenditures (both
public and private) on creative work undertaken systematically to increase
knowledge, including knowledge of humanity, culture, and society, and the
use of knowledge for new applications. R&D covers basic research, applied
research, and experimental development.This page includes a historical data
chart, news and forecasts for Research and development expenditure (% of
GDP) in Pakistan.

Energy use and cost


Demand for CNG has grown 40% annually, while domestic CNG production has increased only
7%, according to government figures cited in media reports.
The combined output of the Sui northern and southern gas pipeline companies, the countrys
only CNG producers, is 1,900 to 2,000 m cubic feet (MMCF) per day while consumption is
2,800 MMCF, said Saqib Arbab, deputy chief engineer of Sui Northern Gas Pipelines Ltd.
(SNGPL).

Electricity shortfall
The electricity shortfall in the country has risen to 5,800MWs. According to PEPCO sources,
presently 7,500MWs of electricity were being generated while the demand had soared to 13,300MW.

Energy resource of coca cola


Coca-Cola announces participation in MARCON 2012
KARACHI: Coca-Cola Beverages Pakistan Ltd (CCBPL) announced the successful conclusion
of their participation in the MARCON 2012 and the expansion of CCBPLs Corporate Social

Responsibility
(CSR)
programmes
in
Pakistan.
The CCBPL involved in the Resettling The Indus (RTI) project. Zohair Mahmood, Director of
CCBPLs external affairs, highlighted the importance of the project and the people of Sindh and
Punjab whose homes were being rebuilt.
9.

Internet!

Pakistan has highest growth rate of internet users in region


With over 20 million internet users in Pakistan, the country now also has 1.79
million broadband users, with an addition of 65,000 in the month of December, 2011 alone.
Pakistans growth rate of internet users is second highest in SAARC countries in accordance with
its population, as it standing at 16.8 percent as compared with 28.3 percent of Maldives.
of HFC users is 37, According to the latest stats issued by Pakistan Telecommunication Authority
(PTA), the number of DSL subscribers has risen to 792,397, while the number WiMAX internet
users has grown to 459,790. The number 491 and 7,215 users were recorded as FTTH
subscribers in December.
So coca cola is using internet marketing and social sites awareness like on facebook, tweeter etc

References
http://www.defence.pk/forums/social-issues-current-events/69796-coca-cola-pakistans-workerexploitation-harassment.html#ixzz2MAioFDvI
http://www.dailytimes.com.pk/default.asp?page=2012%5C03%5C30%5Cstory_30-32012_pg5_10
http://www.viewpointonline.net/fulls...&y=2010&m=july

ww.coca cola Pakistan.com


http://world-politicsreview.blogspot.com/2013/01/pakistan-inches-toward-political.html
http://www.defence.pk/forums/economy-development/5497-pakistan-spending-less-than-twopercent-budget-research.html#ixzz2M5OFMIzD
http://www.defence.pk/forums/economy-development/5497-pakistan-spending-less-than-twopercent-budget-research.html#ixzz2M5O73cXr